Home Seller Tool For 2019

Home Seller Tool For 2019

We have experienced seven years of multiple offers and short supplies of housing inventory in Orange County. This year, 2019, will be a little different with much more inventory. We need to pull out the old bag of tricks again. Here is a description of a “Seller Buy Down” and how it helps both the buyer lower payments and the seller get more net from the sale. Loan Officer Kevin Budde explains below.

A buyer wants to keep his monthly principal & interest payment under $4,500. He makes an offer $75,000 lower than the asking price of $1,250,000 because the 80% loan on a sales price of $1,175,000 is $940,000. At 4.00%, the principal & interest payment is $4,487.

The seller counters at full price but offers to pay 2 points on the buyer’s new loan to buy the interest rate down one-half percent. The principal & interest payment is now under $4,500 the buyer wants on the 80% loan of $1,000,000.

$1,250,000 x 80% = $1,000,000 @ 3.5% = $4,490 P&I

The seller is able to get the price he needs, the buyer is able to get the payment he needs and the seller nets $55,000 more.

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"Ron has been our real estate broker for over 10 years. We bought our starter home through him. Years later, he found our dream home. Because of his expertise and relationships with other brokers, he was able to get us a $43,000 profit on our starter home and had our offer accepted on our dream house even though the seller had 5 offers and one was $10,000 more than ours. He is focused on building ...